Analysts often argue the value of Amazon stock and question whether it is priced correctly. Amazon stock currently prices at $184.04 (April 11 4:00 p.m.). The online retailer giant has more than doubled its stock price, and its P/E ratio currently exceed that of almost all major internet companies. Profits are growing, sure, but there is very little rational about current price levels.
When it comes to free cash flow, Amazon is priced just fine for a fast-growing market leader. What's that? Amazon is also packing a stratospheric top-line multiple, too? Target, Wal-Mart, and Amazon.com are all getting by on 3% profit margins, yet Amazon's price-to-sales ratio is roughly four times greater. Well, here's where we have to consider digital delivery as the means to chunkier margins. Amazon's Prime membership plan is also a winner; it lets patrons pay $79 a year for free two-day shipping of all Amazon-warehoused goods. If you've met someone on Prime, you know that nearly every online shopping experience they have begins and ends with Amazon.com. The convenience of low prices and free two-day delivery -- or just $3.99 for overnight shipments -- is a huge loyalty-builder. Amazon will continue to gain market share, since the Prime moat can't be copied by a smaller rival without its e-tail trust, experience, and breadth of merchandise.
Is Amazon overvalued? No. Is Amazon undervalued? Sadly, it's not. A pullback shouldn't surprise even the most ardent of bulls. However, given the online retailer's momentum, girth, and future catalysts, it's hard to bail on it. Especially as we head into the holiday season, which Amazon.com has historically owned.
Retail industry was slumping few years ago during the period of economic hardship. However, recently, the report from The Wall Street Journal shows that retail sales come in solid in March. “The majority of retail chains, including Costco Wholesale Corp., Macy's Inc. and Limited Brands Inc., reported decent gains for the month at stores open a year or more. Others, including Target Corp., J.C. Penney Co. and Kohl's Corp., posted declines in same-store sales from a year earlier, but the drops were less than analysts projected. Upper-end shoppers continued to show particular strength, with Saks Inc. and Nordstrom Inc. delivering strong results.”(The Wall Street Journal, April.8). In general terms, the retail industry is growing nowadays.
About the stocks, Costco, CVS, ScanSource, and United continental have been the US's hot stocks. William Blair noted that March was the fifth-straight month of average purchases excluding gasoline and currency fluctuations at Costco Wholesale Corp. (COST, $76.41, -$1.41, -1.81%) rising from a year earlier, "which should make it easier for the company to leverage expenses." But Goldman Sachs lowered its stock-investment rating on Costco to neutral from buy as earnings estimates and current stock valuation "fully reflect its strong franchise value, which continues to gain market share as demonstrated by" March's sales strength and outperformance of retail in general for the period.
However, Karen Talley from the Wall Street Journal, predicted that sales in retail industry look like have little spring. "A later Easter holiday and chilled shopper enthusiasm are expected to produce the first monthly drop in same-store sales since August 2009. The chain-store sales results for March, which come out Thursday, likely will spur questions about April's strength.March also saw earthquakes and a tsunami in Japan, which had a direct impact on some retailers that have operations in the country, while curtailing tourist visits—and buying—by Japanese tourists who would have visited the U.S."
h IPad 2. According to Steven Russolillo’s article “Best Buy Temporarily Restricting Some IPad 2 sales” from WSJ, Best Buy now is enforcing the policy that each consumer can only buy a max at 2 IPad 2. There might be various reasons of this action, the most important one is of course the shortage that are driven by Japan’s earthquake and Apple Fans’ passions.
However, Apple is now throwing out the new products much sooner than before. The rumor of IPad 3 and Iphone 5 sounds so real that Apple is going to issue those two products on June. I bet many people are still spending their time in order to get an IPad 2 by that time. W
e all know how great Apple has done, technological, designing and, most successful side, retailing.
If you think about IPad 2, there are actually not many innovations. Apple could do all those on IPad 1. Same thing happens to Iphone 4. Consumers are so exciting every time when Apple releases a new product because they get some new stuff on it. But, those stuff is not actually anything innovative.You just felt you got something new by ignoring the fact that you were able to get those on the last generation of the products.
This is why Apple is so successful. They are not only doing innovations, they are doing great on marketing as a retailer. All those are smart moves as a company, but from my point of view, those are waste. Apple wastes so many recourses to make more profits, in the other words, they do not really have social responsibility.
The retail market continued to have economic gains in March, which leaves the retail industry with a 1.7% increase over the past year. Analysts were surprised by the results and had predicted a .7% decrease. Not surpassingly, the high-end retailers came out on top for profits. Nordstrom saw a 5.1% increase and Saks had an impressive 11.1% increase. This just goes to show the higher-income households are more eager and comfortable spending money.
80% of retailers beat their profit expectations in March, which is a good sign for the economy (LA times). Limited Brands, owner of Victoria’s Secret and Bath and Body works, saw the greatest overall profit gain of 14%. Costco and teen retailer Zumiez also had increases in profits.
Michael Niemera, the chief economist of the International Council of Shopping Centers, believes that this “This gain, in the face of somewhat adverse factors, was encouraging and reflected a solid underlying trend in consumer demand” (LA Times). This is good news for investors and retail companies alike. Analysts believe that there is definitely more consumer confidence in spending. Expectations for April are that profits will conitnue to increase and hopefully there will be more widespread spending among all the different economic groups.
Most retail firms were hard hit by the economic recession. This is mainly because consumers became extremely cautious about how they were spending their money, and curved their spending habits. For example, Amazon, which was on a upward growth since it started to turn profit in 2003, stunned everyone with a remarkable increase in profits in times of recession.High street shops may have been struggling to make ends meet during the recession, but online retailer Amazon is still going strong. According to NetAdvantage, during the 2008-2009 recession Amazon revenue increased, although it was not such a big profit as Amazon usually had, they didn't experience losses. The American company stunned Wall Street analysts by recording profits of $199m for the last three months - a jump of 68% on the same period last year. Sales, meanwhile, rose by more than a quarter to $5.45bn. Estimates had suggested that the Seattle-based company was due to rake in around $5bn in sales for the period ending on September 30.Amazon was particularly buoyed by the success of its Kindle electronic book reader, which founder Jeff Bezos said was now a mainstay of the Seattle-based company's strategy.
LVMH, is the world’s largest luxury-goods group, for decades LVMH’s formula has worked like a spell: seduced by beautiful status-symbols, perfect shops and clever advertising, millions of people have swooned forgetfully towards the firm’s cash registers. At Louis Vuitton, LVMH’s star company, the model’s pricing power has yielded consistent profit margins of around 40-45%, the highest of any luxury-goods brand. During recessions customers found it far harder to forget about price. The seriously rich, of course, still spent freely. But much of the industry’s rapid growth in the past decade came from middle-class people, often buying on credit or on the back of rising house prices. In the first half of 2009 the group’s revenues were about the same as a year before, though profits were 12% lower. Two divisions—wine and spirits, and watches and jewelry—were the worst affected: their revenues each fell by 17% and their profits by 41% and 73% respectively (see chart 2). The falls were offset by Vuitton, where revenue rose by a double-digit percentage, registering gains in every market. “It is incredible that in a downturn the consumer still buys so many Louis Vuitton bags, but she or he does,” says Melanie Flouquet, luxury-goods analyst at JPMorgan in Paris.
The largest apparel maker in the world by revenue, VF continued to add new retail stores and plans to snap up new brands in order to survive the recession. VF Corp experienced losses in revenue after the 2008-2009 recession. When Mr. Wiseman, formerly the company's chief operating officer, became chief executive of VF in January of 2008, the economy was still sailing on a consumer spending boom. But nine months into his new role, the boom was over. VF's earnings slipped almost 30%, to $115.9 million, in the critical fourth quarter. For the full year, operating income fell for the first time since 2000. They have since bounced back in 2010 due to their strategy, the company went on an acquisition spree, snapping up a dozen new "lifestyle" brands, such as outdoorsy label Napapijri, surfer brand Reef, and women's yoga-inspired active wear brand Lucy. "We know the challenges of the upscale department stores," said Mr. Wiseman. Nevertheless, he defends his strategy, arguing that, for now, VF can capture consumers at lower- and mid-tier retailers, but "when they shift back up to luxury we can catch them there as well." Mr. Wiseman said that the company is keeping a close eye on its balance sheet, which had $382 million in cash at the end of last year, and a $1.3 billion letter of credit. VF has no long-term debt coming due until the fall of 2010.
According to the report from NetAdvantage, analysts tend to believe that the industry as a whole is still be affected by the economic crisis in general. The report also pointed out that although the US economy has officially been in recovery sine June 2009, the consumers’ confidences remain weak because of the high employment rate. However, the report also points out that the high-income class is feeling positive about the future and, it is an important indicator because this would lead consumers out of prior recessions.
The recession affected most companies domestic companies in a negative way. However, there are other raising economies which have been less affected by the recession, so multinational companies have been less affected by the recession.
Among those multinational companies, luxury brands like LVMH Moet Hennessy are having an easier time because of the other economies that are less affected by the financial crisis such as China and Japan.According to the article “LVMH’s Net Income for Year Soars 73%” from New York Times, the net income of LVNH 2010 surged 73 percent to $4.1 billion. The article also states that “demand from the newly affluent, especially in Asia, is driving much of the rebound in the luxury industry after overall sales slumped around 8 percent in 2009.” Which also suggests that luxury brand is a very good investment opportunity.
Among those stats, it is clear that companies’ revenue related to their supply elasticity. Most companies which have inelasticity supplies will do better even during recession.
Amazon, the giant online retail company recently “took the plunge” and made swift entrepreneurial decision to launch Cloud Drive. Cloud drive is an online internet service where one can store music and other digital files and then be able to access them via internet servers, smart phones and other digital devices. Cloud Drive will not only enhance Amazon’s impressive retail business, but also allow consumers to depend on Amazon-only products. Amazon is offering 20 MGB of online storage to anyone who purchases the Amazon MP3 devices.
Companies such as Google and Apple are trying to integrate products similar to Cloud Drive, but because of strict company licensing agreements there has been little headway. Amazon’s creation of sound cloud so quickly is because of it’s business model. Amazon uses a service called EC2, which is an elastic online server that handles all the spikes in traffic. Amazon’s business is successful because it is developing business models that coincide with developing technology. Amazon was the first popular online bookstore, and largest online retail company. The sound cloud serves as another example as to why Amazon will continue to grow financially and establish it’s dominance as an even bigger player in the retail and technology world.
I interviewed a realtor in Long & Foster company, and talked about the USA landscape in retail industry. Long & Foster is the largest real estate company in the Mid-Atlantic region. Lucy Lu, has worked in this company for years, she is a realtor in the company and is responsible for the real estate transaction. As a realtor, she has both clients that want to sell and buy houses in D.C area.
From the interview, I have known that in Lucy’s opinion, Washington D.C is a good place for real estate. Because D.C is a political center and also a cultural center in the U.S. It is also the capital of the U.S. These characteristics make D.C a very potentially place to do investment. Due to D.C is a city that has lot job opportunities in government, so there will be people from other cities transfer to D.C, and then they will need a house to settle down.
D.C area is a very potential place to invest real estate. Because Washington D.C has a lot tourist points and a lot convention centers. Also, it is a political center and a cultural center, there will be a lot students come to study here, and also will be a lot people come to work here. These lead to an increase in catering industry and tourism industry, it leads to more job demands. Again, this will lead to more houses demands.
My information interview is Mr. Yoshio Ishibashi. Mr. Ishibashi is retired from Sony company three years ago. During his time at Sony, he has been working as a logistics manager, CEO of China branch and senior advisor. Mr. Ishibashi stressed the importance of company loyalty in Japan. Japanese society is tend to respect people who contribute their whole life to one company, and it is very weird if someone change jobs. Which is also why Mr. Ishibashi works for Sony all life long.
Mr. Ishibashi pointed out that communication skill is very important for retail industries, especially for multinational corporations. For instance, Sony has many factories in China, so as the CEO of China branch, Mr. Ishibashi needs to negotiate with local factories to ensure they can fit the Sony standard with the lowest price. When he was working as the logistics manager, he also needs to communicate with the factories and stores to make sure the amount of store in order to keep the lowest cost. Besides communication skills, it is also important for employees to be familiar with cost table and stock market.
I also asked Mr. Ishibashi if Sony has any particular positions for entry employees. According to him, Sony has a quiet different system for entry employees from US companies. For all the entry employees, who are called as “New People” in Sony, they have particular courses that need to be taken at Sony, and will work for different departments. After couple years, those “New People” will be signed for actual positions and start working as all the other older employees.
Different corporations have very different company cultures, which are also affected by countries’ cultures. However, there are common characters that all corporations will require from their employees, such as communication skills.
For my Informational Interview I personally interviewed Katie Salah, the store manager for White House | Black Market at Wisconsin Place. White House | Black Market is an American fashion store targeting women 25 years of age and older.White House | Black Market is known for its sleek lines, and its focus on white, black, and other variants of the two colors. The brands significant focus is on creating a comfortable, inviting and hospitable atmosphere for customers. Seating is available in store with water available. During special events food and refreshments, and catering are occasionally offered.
While talking to Miss Salah she told me about her responsibilities which include hiring and training new employees, motivating the associates to sell, making our numbers every day and how the store performs at the end of every week day month year, and also solving any conflicts within the store, if any. When talking about hiring and training Miss Salah pointed out that the retail industry in general has a high turnover rate; therefore, it is her job to be constantly training new staff. We also discussed where she believed there would be an increase in employment in retail in the future. She answered that where she sees room for developing is in technology, and improvements to the system that is used to “ring up” transactions. “I think there’s going to be more technology in the stores, for example right now we have some of our marketing has a barcode on it that if you have that app in your phone you can scan it and it pulls up like a list of styles or something like that or advertisements in magazines.” Also she remarked that the social media, such as Twitter and Facebook has helped the store sell more since people know about discounts and specials sooner and the WHBM is also able to reach out to an extremely large clientele.
When I asked her how WHBM differed from its competition such as Anne Taylor, Liz Claiborne and other stores, Miss Salah said that WHBM has a higher level of customer service since they make shopping more of an experience, and the people who work there are not just sales people they are personal stylists: “We try to give every customer the same experience we’re not just there to go get them sizes and ring up their transactions, but were there to help them see how to wear things, how to do it differently and to make them feel comfortable and beautiful.”
Lastly we talked about how WHBM and the whole retail industry in general was impacted by the recent economic recession, she answered that people were more conscious about what they were spending their money on, maybe less disposable income, so less money to spend on the things that they want and looking to purchase just the things that they need, getting what they need for a particular occasion and that particular season and not really going overboard and getting all they want.
The Wilmington Country store is a specialty store that sells upscale clothing and accessories. It carries brands such as Vineyard Vines, Lilly Pulitzer , Eileen Fisher, and Ugg. Margaret’s job at the Wilmington Country store entails all the things a sole-proprietor does. As a sole-proprietor, she calls herself mainly a buyer. As a buyer, she must find vendors with various sportswear, dresses and accessories that fit the image of her clientele. Margaret works with vendors at trade shows to select merchandise for her store.
Margaret hires people from all ages to work in her store. High-schoolers work there during peak seasons, such as time surrounding holidays. However, she prefers employees with more retail experience. Typically, the employees have a 3-day training period where they learn how to run the software and how to deal with returns and manage sales. She mentioned how working on the retail floor an employee has to act as a “marketer and psychologist.” The marketing part refers to selling the item, and being a psychologist means having good conversations and relations with the customer. The employees she hires must be cheerful, adaptive and “leave their problems at the door.” Margaret’s business upholds a relaxed, yet clean and preppy look, which the employees are expected to embody as well.
The greatest competition for a specialty store such as the Wilmington Country Store is the internet, or vendor competition. The internet can sell the same item directly for the company for cheaper than the Wilmington Country Store. Vendors can also decide to open up their own stores, which draws consumers away from speciality stores.
Margaret believes that the internet is also the place where the retail industry is growing the most. She mentioned that rents and costs keeps rising, but internet costs remain the same and clothes are much cheaper online. For her personal store, in the future she hopes to make her company more vertical by adding more stores and then manufacturing her own clothes, instead of buying from vendors.
The current CEO of VF Corporation, Eric Wiseman has been instrumental in helping his company stand its ground during the 2008 economic meltdown. VF Corp. sells its well-known brands, such as Lee, Nautica, The North Face, Wrangler, and Vans, through more than 67,000 retailers in about 150 countries. The company owns and operates more than 700 retail stores, including about 60 outlet stores.
Prior to 1998, VF Corp. derived most of its revenues from manufacturing brands such as such as Lee, Rider, and Wrangler, and selling them wholesale to large retail stores. In 1998, VF Corp. aggressively began acquiring well-known active wear and contemporary brands, such as Nautica, The North Face, Eagle Creek, Eastpak, lucy, Vans, and several others. The company rid itself of unprofitable brands. In 2004, VF Corp., which had revenues of $6 billion, launched a bold growth strategy to transform itself into a global lifestyle apparel manufacturer and retailer. "We Fit Your Life" became the mantra for the company's growth strategy.
With Eric Wiseman as CEO, at VF Corp. they have been controlling expenses, investments and lowering inventory and capital expenditures to make up for the revenue decrease of about 5% during the economic recession. In 2008, VF Corp. reported an all-time record for revenue and an all-time record for earnings per share. They delivered $679 million in cash flow, which was above the five-year average and the second highest number in five years. Also, 2008 was the 36th year in a row that they increased our dividend to our shareholders. It is a good part of why VF Brands is a good investment. They ended that year with more cash than they started and they ended the year with less debt than they started with.
In November 2010, VF Corp. began a process of outsourcing their IT services to CSC, a global leader in providing technology-enabled solutions and services, in a seven year outsourcing agreement. Under the agreement, CSC will bring new, innovative approaches to VF’s business use of IT, covering a broad spectrum of services, including service desk, end user support services, network services, distributed computing services and data center management services. Work will be performed utilizing CSC’s worldwide network of delivery centers. The transition from VF’s current information technology services provider to CSC is expected to be completed by the end of August 2011.
Mike Duke, the fourth CEO of Walmart, had been handed the reins of the world’s largest retailer. He was outlining his heightened expectation for walmart’s leadership role in the global sustainability effort. Mr. Duke’s decades of experience in the retail industry, his years of executive leadership experience across multiple operating divisions of our company, his international retail experience, and his expertise in corporate strategy, development and execution, all of these made him an Influential leader in retail industry.
Also, under his operation, walmart is changing the structure. Wal-Mart is combining divisions and creating three distinct geographic business territories in the United States.The changes will make the company more efficient and accelerate growth, according to Eduardo Castro-Wright, Wal-Mart vice chairman. The restructuring includes aligning Puerto Rico stores with Walmart US; dividing Walmart US into three business units, Walmart West, Walmart North and Walmart South; creating e-commerce through a global.com organization; and combining logistics, real estate and store operations under the same leadership. Wal-Mart eliminated “a relatively small number” of field merchandising positions spread across the country, said Dave Tovar, Wal-Mart spokesman. He declined to provide a number of jobs lost, but said former associates would be paid until April 9, could apply for other Wal-Mart jobs and would get help finding other jobs.
LV, Fendi, Givenchy, Dior and Hennessy etc. Everyone has heard at least some of those luxury brands, and we all know how expensive they are. However, you may not know that all those luxury brands are all managed by one company, LVMH. LVMH is the biggest luxury products group. It was founded in 1987 as a result of merger between Louis Vultton and Hennessy, which is also why those two brands are still on the front page of its website today, even LVMH has decades of other luxury brands now. In October 2010, LVMH bought 14.2% of Hermes, it said that it is not seeking control o
f it, but LVMH’s leading position in luxury retail industry seems unshakable now.
Like the blog I wrote before, luxury brands like LVMH seems has not been affected by the economic decline in the past few years. Actually, all the data show that it has a very strong sales growth. Compares to the other retail stores that are been struggled by the decline, LVMH is very unique. However, it has its reasons. Luxury brands have a very large market that has not been opened up yet. Rich people in countries like China, Brazil are still seeking for goods that can help them look as rich as they are. According to the article “LVMH’s Net Income for Year Soars 73%” from New York Times, the net income of LVNH 2010 surged 73 percent to $4.1 billion.The article also states that “Demand from the newly affluent, especially in Asia, is driving much of the rebound in the luxury industry after overall sales slumped around 8 percent in 2009.”
LVMH is now the model of retail industry, especially when people are still wondering if the economic crisis has gone at this point. Consumers still have confident on luxury brands like LVMH, while the investors should look at this more seriously.
Today I had an interview with a friend of mine who is a sales associate at Vineyard Vines which is located in Georgetown. Vineyard Vines is a retail clothing store which was started by two men, Shep and Ian Murry, in Martha's Vineyard, Massachusetts. They now sell all sorts of summer'y' clothing and have an extensive line of ties for men.
I interviewed someone named Marty Jennings who lives in Bethesda, Maryland and commutes to Georgetown when he is not attending school at University of Maryland. I began the interview by asking him a few questions about Vineyard Vines, specifically there demographics of Vineyard Vines. He told me that Vineyard Vines targets the upper-middle class people who loves the beach and spending time at the country club. I then asked him about specific work of employees of Vineyard Vines and he told me there are two main positions. Sales associates who are responsible for sales, and general cleanliness of the store, and stock room employees who are responsible for keeping the store stocked up and making sure nothing is missing and everything is displayed well. I then went onto
to ask him about
The last few questions I asked him I found particularly interesting. The first one was, "What do the management look for when hiring new employees?" He responded by telling me they look for a specific appearance style in their employees as well as looking for personality traits. My final question to him was what is the difference between stores like Vineyard Vines, Ralph Lauren, and Brooks Brothers? He told me they all attract different people with different needs. Vineyard Vines attracts the fun loving people who don't want much out of their clothes where as places like Ralph Lauren and Brooks Brothers attract people who come for luxury clothes, personal alterations, and sales people who know all of their likes and needs.
What doesn’t Amazon.com sell? Even though it started off with simply books, now you can get things ranging from music to shoes to clothing. Amazon did not start with all this merchandise, it has acquired all these industries over time with pricey and sometimes risky acquisitions.
Amazon’s first big purchase was Exchange.com in 1999 (Pepitone). This purchase intended to open up the Amazon marketplace to 3rd party sellers. This pivotal move encouraged buyers and sellers alike to partake in Amazon’s deals. Amazon’s acquisition of Exchange.com made Amazon’s marketplace what is it today, and it continues to be extremely successful. Stock for Amazon closed at $103.59 the day of the deal and closed that Friday at $186.50 (Pepitone). Amazon’s incorporation of exchange.com essentially dismantled the site and relaunched it as part of Amazon
Another purchase Amazon made was to branch into the music industry too. Amazon bought AmieStreet.com, which was a webpage that music artists could post songs and AmieStreet would post the prices according to popularity, with more popular songs there was a higher cost. Amazon bought AmieStreet in 2010 and then shut down the site and “redirected it to Amazon” (Pepitone).
Lastly, Amazon’s most expensive acquisition was the purchase of Zappos.com, which is sort of comparable to a shoes retail version of Amazon. Amazon saw competition from Zappos, which is a popular online retailer. Amazon had to ask Zappos twice before they accepted the offer. Unlike with exchange.com an AmieStreet, Zappos has not integrated into the Amazon superstore. Their website remains, and customers do not find the exact same shoes on both sites.
Amazon finds new ways to distribute a product, which leads to it’s continuous success. They have smart and decisive business moves, which result in more profit and products. With a constantly rising stock, Amazon is a good investment with smart business plans.
IKEA’S success as an innovator is undeniable. The company was the first to make beautifully designed home furnishings widely available at low prices; and they created an iconic global brand in the process. IKEA products have become synonymous with value, design, and accessibility. Take IKEA for an example; there are several aspects that such retailers can innovate. First of all, the location of the store is changeable. Crowded downtown is always the choice for retailers to locate their store, however, differently, IKEA locating their stores in suburb area. This makes the store more room available to serve people.Second of all, consumers’ preference is also important. IKEA’s products are especially designed for young people who are under 35 years old. Those products are cheap and always meet the taste of young. Additional, promotion activities are also an opportunity for innovation. IKEA’s promotion activities are very creative and as a result, every IKEA store will attract a lot people because the promotion.
IKEA is an innovator in retail industry. Retailers should take IKEA as an example and learn the IKEA strategy to make a progress.
In the past few decades technology has advanced in unprecedented ways. It has enabled us to do things in faster more efficient ways; these technological advances have influenced even the way we shop. As a college student now I do not have the amount of free time I used to have when I was younger and therefore cannot afford to spend inordinate amounts of time going shopping as I did before, so thankfully enter online shopping. This miraculous invention was pioneered in 1994 by Intershop a German company; after that in 1995 Amazon began and in 1996 eBay started its operations.
Today, almost twenty years later, new technology has once again revolutionized shopping. Smart phones have provided a new frontier in online shopping.
An article published in Forbes Magazine is related to this topic, they write that with the growth of mobile networks, stores will have the capability to help customers have a different retail experience. Among the software that is in development, is software that would allow shoppers to check the Internet for online promotions, product descriptions, and even “try on” clothing. New mobile capability, social networks and better analytics will play an important role in the future of the retail industry, according to speakers on a recent Wharton retail conference titled, "E-Commerce: Is It the Future of Retail?" "Mobile will be a critical piece of retailing, even more so than shopping online," said Dave Larkins, vice president of NetPlus Marketing in Conshohocken, Pa., and a co-creator of online boutique The Colony.
One of the leaders in the development of e-commerce is Amazon.com, which started out as an online bookseller but has now broadened its scope to every major retail category. Amazon, a store with no brick-and-mortar locations, continues to dominate the online shopping marked.
There are still a few issues to work out in order to make online shopping as dominant as a physical shopping experience. Among those things is that online stores are unable to provide the instant gratification that buying something in a store and taking it home provides, the wait time and shipping charges are a couple of things that sometimes makes shoppers bail on purchasing. A potential game-changes in the industry would be for retailers to have the ability to get an order to a shopper’s home in a matter of hours, not days or weeks.
Who knows how shopping will be different in the future?
All industries face competitions all the time. For retail industries, most common skill might be discount to get more consumers to buy form its own company. Might because retail industries seem like have less opportunities for innovation compare with many other industries. After all, most time retail sales depend on the products themselves. So if the products are out of time, the retail skills can help in very limit ways. so in this day and age, people prefer iPad or Kindle more and more, it seems less surprise that Borders, used to be the biggest book retail company, got bankruptcy. According to the article “How Much Do You Read These Days” by Rachel Emma Silverman on Wall Street Journal on 17th Feb, is was caused by a number of factors, which includes “the rise of electronic books, the dominance of internet retailing and the poor economy”; nevertheless, it is very much because of the innovation of electronic reading tools such as iPad and Kindle.
After all, what kind of innovations can book stores make to resolve the crisis of reading? From my point of view, I think paper books are more and more like collections for people to stow rather than reading for knowing something now. Retail stores l
ike Borders may need to change their way to sell. They are now not only
competing with the other book retail stores but also mainly with the electronic books. There is no question that electronic books are cheaper and more convenient than paper books. So if retail books stores want to survive, they need to sell books not as books, but as gifts or collections.
Designers and brands such as Ralph Lauren, Lilly Pulitzer, Brooks Brothers, and Tommy Hilfiger all produce similar style clothing and are shifting towards the "ivy-style, classic prep, and nautical" looks for the 2011 spring and summer seasons. This look is very well described as the 1960's "Ivy-Leagure" style which would be found in America's most elite schools such as Harvard, Yale, and Princeton. Male students there would not hesitate to wear to a pair of embroidered pants with a herringbone, or tweed sport coat, or in the warmer months, a madras blazer with faded red, also known as Nantucket Red pants or shorts. Since the 1960s this look has faded away to the younger people but a few big time designers are fighting to bring it back.
Tommy Hilfiger has been working to bring back to ivy-style and the nautical-style of the 1960s. He
has been so successful that he has opened his tenth store in Americ
a, located in East Hampton, NY. As Hilfiger himself said about opening his new store, "East Hampton dressing is about Americana; it's fun yet sophisticated. Our new store embodies the brand's philosophy of democratic dressing, offering a full range of men's and women's collections and accessories." Hifiger will be offering a line called Hamptons Bohemia exclusively at this new location. The collection is nautical inspired and offers cricket sweaters and lobster embroidered shorts. Men's and women's lines will include a mix of U.S. and European sportswear, with men's also having tailored pieces, and for women the runway collection and swimwear.
His East Hampton store is only 1,850 square feet, but is decorated to give the shopper the nautical feel as they walk inside of the store. According to an e-mail interview, the interior is described as "traditional-meets-modern" with walls accented in leather and walnut paneling decorated with antique brass fixtures. Persian rugs are overlaid on a herringbone oak floor, while aged leather and linen seating offer a stylish place to sit while waiting for a shopping companion to emerge from the dressing rooms.
Hilfiger finishes his email interview by saying:
"The Hamptons reflects Americana in its classic yet
fun style, which is the inspiration for my designs and brand philosophy. We designed the store to blend seamlessly with its landscape, from the colors to the product mix. We feel that this is the right location at the right time, and I'm thrilled we now have a location that caters to both the local customer and tourist in the Hamptons."
Nordstrom, a popular high-end department store bought retail and flash sale website HauteLook Inc. for a reported $270 million dollars. This type of acquisition is helpful to Nordstrom because it will help it have more of a presence on the web and also continue to reach out to it's clientele in new ways.
The question on everyone's mind now is "What is a flash sale sight? How will it help Nordstrom?" Answer: A flash sale site is a website that holds 24 hour (give or take) sales on luxury clothing items, furniture and sometimes even vacations or cruises. These website are often exclusive with a members only policy. Nordstrom hopes to make HauteLook as profitable and extensive as other flash sale sites such as RueLaLa and Gilt (WSJ.com). The flash sale sights came about during the recession, when luxury clothes were no longer a popular item and inventories need to shrink. They have been popular since then, but recently full priced luxury items have been bought more constantly since the recession.
The flash sale sites seem to making an impact on Nordstrom already, and it is predicted to be paying $180 or $90 million dollars in stock based on previous estimates. Nordstrom does not want to integrate the company and label it a 'Nordstrom company' because Nordstrom already has a substantial web page for their department store and does not need the confusion of having another luxury discount company that might get shoppers confused with the discount-Nordstrom Rack stores.
This acquisition will ultimately help Nordstrom if the country continues to stay in a state of mind where discounted clothes are wanted, but if the economy continues to grow, the sites will probably not make as much as anticipated. The exclusivity of the site will continue to motivate members to buy from HauteLook, but it might just be a one trick pony for the short term until the economy reaches a point where luxury clothes can be purchased at full price.
Lately the economy has seen a surge, and many seem to think it is in a state of recovery. As a response to this, retailers have started using different strategies to try and bring in more customers. For example Home Depot, which is usually affiliated with men shoppers have tried to appeal to the female demographic by changing the layout of their stores or adding new products. Home Depot has added a line of Martha Stewart Living merchandize in hopes that this move will attract women who are renovating a part of their home.
In this market stores need to find a way to cater to as many clients as possible but that sometimes means changing the way people look at your store. For example, home improvement stores get a bad reputation for only catering to men and women sometimes feel unwelcome. "Sometimes they seem to feel like you're just a girl, you don't know what you're doing, you need to get your husband in here," said Ms. Butler, 25, who lives in Loxley, Ala. "It's intimidating for any female to walk into a home improvement store."
Without a housing recovery to revive sales of big items or major renovation supplies, home improvement stores are promoting smaller projects for spring, home improvement stores' major selling season. And that means sprucing up departments to get women shoppers excited about window treatments or new colors for makeovers of existing spaces.
Experts say that since the economy is still in a state of recovery people are still not comfortable buying houses because their income is not stable so companies like Home Depot and Lowes are trying to bring in people who are renovating. Changes in layout like wider aisles, warmer colors, less metal displays, mood lighting, more wood tones and comfort zones areas where customers could review paint samples or plan for remodeling are small changes that can make female customers feel more welcome.
